Puffery is an interesting legal concept.

Basically it allows individuals and business to make claims that are not true, so long as it is in a context where the fact that is propaganda is clear.

So, (sorry Kurt Russel) when a car dealer says that they have miles of cars, it’s OK, or when you say that a horror movie wopn’t scare you, it will f%$# you up for life, or that the beer you drink will lead you to hook up to the Swedish bikini team, it’s OK. (Also Joe Isuzu)

On the other hand, making specific verifiable misstatements, for example, claiming that your car gets 100 mpg when it get 12 mpg, is false advertising and fraud.

It can be a fuzzy line sometimes, but when Wells Fargo asserts that promising not to spend every waking hour trying to figure how to rip off its customers also qualifies as puffery, I take exception:

If you’ve ever wondered how businesses can get away with making transparently false or deceptive claims about themselves or their products — “The Best Tasting Juice in America,” Wrigley’s gum is “for whiter teeth, no matter what,” etc., etc. — the answer is an all-purpose legal dodge known as the “puffery” defense.

Simply put, judges and regulators have ruled that when a business makes a claim that is either vague or so obviously inflated that people simply won’t believe it, that’s “puffery,” and not actionable in court.

Wells Fargo, which is struggling to rebuild its reputation for integrity after a string of scandals involving consumer rip-offs, is testing the limits of the “puffery” defense. In a legal filing last week aimed at getting a shareholder lawsuit dismissed, the company asserted that statements that the bank was working to “restore trust” among its customers and “trying to be more transparent” about its scandals — statements made by its chief executive, Tim Sloan — were, well, just puffery.

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“This is just another example of corporate actors making statements to the market, and then trying to avoid liability for the representations they made,” says Darren Robbins, the San Diego lawyer bringing the shareholder suit.

If it sounds like a strange thing for a bank to say when it’s trying to present itself as a paragon of rectitude — in essence, “We can’t be sued because no one believed us anyway” — just wait. It gets stranger.

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The lawsuit at issue concerns a scandal that erupted in public in July 2017, when it became known that for years Wells Fargo had been charging auto loan borrowers for unnecessary insurance on their vehicles. The lawsuit seeks class certification for all investors who bought the company’s stock from Nov. 3, 2016 — when Sloan announced at an investors conference that he was “not aware” of any undisclosed scandals in sales practices — through Aug. 3, 2018, the day before the bank formally disclosed the auto-loan issues in an earnings report.

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Regulators are justifiably furious. In April, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency folded in the auto loan case with an investigation of improper fees Wells Fargo charged to mortgage applicants, and penalized the bank $1 billion for both. It was one of the largest bank fines in history.

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What about Wells Fargo’s repeated assurances that it is moving heaven and earth to be more transparent and regain customers’ trust?

That’s where “puffery” comes in. The defense most commonly arises in connection with advertising, as when the Federal Trade Commission investigates whether an advertising claim is deceptive. Over the years, courts have given businesses ever more latitude to make extravagant claims.

Ultimately, puffery has become defined as “advertising claims that ordinary consumers do not take seriously, as the Harvard Business Review observed a few years ago. But if that’s so, then what’s the point of advertising?

A couple of things here that are important to note:

• They were making statements about THEIR OWN BEHAVIOR, and explicitly stating that they would not do things that would put them in regulatory crosshairs ever again, and that they would pursue bad actors in their firm and remove them. 
• This was not an advertisement.  IT WAS A STATEMENT TO SHAREHOLDERS, and as such was a deliberate omission of material facts about the health of the company.

Just  try them, convict them, and make them forfeit all their ill gotten gains, and be done with it.